Market Segmentation, Targeting, and Positioning

Waleed Khan Afridi

Mr.Afridi, Kabul Institute, Kabul

MS-Leading to PhD Member SDPI, South Asia 1 Member PJMS

Overview of Market Segments and Target Markets

Market Segments: Groups of customers with different wants, needs, behaviors in a market are called market segments. Target Market: A specific Market Segment of (customers or organizations) for which the seller designs specific promotional activities is called as Target Market. Market Segmentation: A process of dividing the total market for a good or service into small, same groups.

Mr.Afridi, Kabul Institute, Kabul

Benefits of Market Segmentation

Customers with similar wants, needs and characteristics can be focused. It is easy to design promotional activities for a specific segment. By targeting a specific segment, much investment can be saved. It is easy to manage a specific segment of market.
Mr.Afridi, Kabul Institute, Kabul 3

Process of Market Segmentation

Intuition based on experience and judgment. Copying competitors and earlier market entrants. Process Steps: Identify the wants and needs of the customers which are not satisfied in a market. Identifying the characteristics that distinguish segments (age, gender, likes and dislikes). Identify the size of the segments and estimate demand for the product (Sales).

Estimate Demand for products

Identify Needs

Identify Characteristics

Market Segmentation Process

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Mr.Afridi, Kabul Institute, Kabul

Ultimate Consumer and Business Consumers

Ultimate consumers who buy goods or services for their own personal or household use. Business users who buy goods or services to use in their businesses, to make other products, or to resell to other business users or consumers.
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CONSUMER MARKETS ARE COMMONLY

FURTHER SEGMENTED ON THE BASIS OF:

Geography Demographics Psychographics

Mr.Afridi, Kabul Institute, Kabul

Segmentation basis Typical market segments

Geographic: Region New England, Middle Atlantic, and other census regions Under 25,000; 25,001-100,000; 100,001500,000; 500,001-1,000,000; etc. Urban, suburban, rural Hot, cold, sunny, rainy, cloudy

City Population
Urban-rural Climate Demographic: Income Age Gender Family life cycle Social class

Under $10,000; $10,001-$25,000; $25,001$35,000; $35,001-$50,000; over $50,000 Under 6, 6-12, 13-19, 20-34, 35-49, 50-64, 65 and over Male, female Young, single; young, married, no children, etc. Upper class, upper middle, lower middle, upper lower, etc
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Segmentation basis Typical market segments (cont.)

Demographic (cont.): Education Grade school only, high school graduate, college graduate Occupation Professional, manager, clerical, sales, student, homemaker, unemployed Ethnic background African, Asian, European, Hispanic, Middle Eastern, etc.

Psychographic: Personality
Life-style

Values

Ambitious, self-confident, aggressive, introverted, extroverted, sociable Activities (golf, travel); interests (politics, art); opinions (conservation, capitalism) Values and Life-Styles

Mr.Afridi, Kabul Institute, Kabul

GEOGRAPHIC SEGMENTATION
Regional distribution because people within a given region tend to share the same values attitudes and style preferences. Urban, suburban, and rural distribution.

Mr.Afridi, Kabul Institute, Kabul

Geographic Segmentation (Example)

Nestle Mineral Water Company, in Pakistan decided to divide the Karachi Market (Capital City of Sind Province) into segments on the basis of Geography , and Geographic Segmentation was done. Karachi Market was divided into Rural, Urban and Sub-Urban Areas. Individuals needs and wants of clean drinking water were identified in Urban Areas, Rural Areas and Sub Urban Areas. Individuals living in those areas wanted clean drinking water plants in their local areas. According to the needs and wants of the consumers living in Rural Areas, Urban Areas and Sub-urban areas, clean drinking water plants (Mini-size) were established in the locales (Streets) etc.
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DEMOGRAPHIC SEGMENTATION
Age, Gender, Education etc
Age Social class: A measure made up of a combination of characteristics such as level of education, occupation, and the type of neighborhood one lives in. Ethnicity

Mr.Afridi, Kabul Institute, Kabul

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Demographic Segmentation (Example)

Dolce and Gabbana a US Canvas firm, decided to segment the market of South Carolina on the basis of Demographic characteristics and those consumers whos ethnicity belonged to Africa were targeted, meaning that they focused Black consumers. D&G decided to produce Black Jeans Paints as the black Jeans were not available in the markets and they were according to the need and wants of Black Consumers (American African).
Mr.Afridi, Kabul Institute, Kabul 12

PSYCHOGRAPHIC SEGMENTATION
HOW A PERSON THINKS, FEELS, AND BEHAVES. Personality characteristics. Lifestyles, including activities, interests, and opinions. Values, are principles of society that are acceptable to the society members.

Mr.Afridi, Kabul Institute, Kabul

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Psychographic Segmentation (Example)

Arctic engineers, the producers of Gymtronics (Weight reducing device), decided to segment the market of California State of USA on the basis of Life Style characteristics of Consumers. In this way the needs of consumers were identified who were over weight and wanted to reduce weight to enhance their lifestyles activities. Gymtronics guaranteed weight loss and thus Psychographic Segmentation was done.
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Target Market Strategies

A Process of focusing a specific market segment by shifting all promotional activities to that segment. Targeting includes advertising, personal selling and direct marketing.

Market aggregationtreat the total market as a single segment. Kabul City is a total market for ACER Computers. Single-segment concentrationfocus on one segment. ACER Computers has targeted a segment of Foreigners as they have money and are rich. Multiple-segment segmentationselect two or more segments and devise different marketing mixes for each. ACER Computers have targeted Foreigners and those who work in offices, mean Officer Workers.
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Thank you very much for your time!

Mr.Afridi (waleedafr@yahoo.com) Please send you feedback through email. Keep Smiling Please..!

Mr.Afridi, Kabul Institute, Kabul

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Disclaimer
It is to notify that these slides have been made with the help of the Text Books and Reference Books that are permitted by the Preston University, USA (www.preston.edu) and the Kardan University (An affiliate of Preston USA), Kabul, Afghanistan. The students/users are advised to use the slides without any doubt and fear of getting falsified knowledge. In case of any doubt or problem the Mr.Afridi may please be contacted. Recommended Books: Marketing (Concepts and Cases) Thirteen Edition/Special Indian Edition (LPE) by Etzel, Walker, Stanton and Pandit, McGraw Hill Publishers. Principles of Marketing, (LPE) Twelfth Edition by Philip Kotler and Gary Armstrong, Pearson Education Publishers.